Flexible software licensing model offers new opportunities for smaller engineering companies

As the industry comes to terms with the “lower for longer” oil price situation, a number of smaller Engineering, Procurement and Construction (EPC) contractors are emerging with specialism-focused offerings, or regionally-focused offerings for Oil & Gas facility owners and operators. By identifying innovative new practices to manage costs during periods of low activity with the ability to rapidly scale up operations during peak periods, smaller engineering firms are now able to either compete with or work alongside much larger contractors.

To do this, smaller engineering companies must have access to enterprise technology and that has previously proven cost prohibitive. Conventional software licensing arrangements with a variety of initial and annual agreements, rentals, renewal dates and restrictions on product use that do not fit the changing business needs of smaller EPC contractors who need the ability to continually tailor licensing costs to business peaks and troughs.

Project Design Group Ltd (PDG), a multi-discipline engineering and project management consultancy, has addressed this issue by taking advantage of a flexible software licensing model being offered by AVEVA that provides usage-based access to AVEVA’s full Integrated Engineering and Design suite, including engineering data management, 2D drawing and 3D modelling tools. This allows PDG to tightly control its licensing costs and still get maximum value from AVEVA’s software.

“Historically, enterprise technology has always aided the larger, more established organizations.” Andrew Rhodes, Managing Director at Project Design Group Ltd explained. “Without a flexible licensing model, it would be difficult for PDG to access specialist engineering and design software due to the initial investment required.”

A flexible licensing model also enables a company to “cherry pick” the applications that are required for a specific project. Tools that are not being used can effectively be ‘shelved’ until required. This means the license is always optimized for what is actually being used.

AVEVA now provides flexible licensing for its full suite of Integrated Engineering & Design tools, including market-leading technologies such as AVEVA Everything3D (AVEVA E3D). Instead of fixed licenses, clients buy ‘tokens’ for their planned software licensing and ‘spend’ them exactly as their needs dictate.

By introducing innovations such as flexible software licensing the industry is responding to the need to optimize operations during the downturn in the oil & gas market. This is creating opportunities for smaller specialist firms to emerge and gain ground with EPC companies such as PDG competing for major engineering projects against much larger businesses. The lines between traditional tier 1 and tier 2 contractors are blurring and the result of increased competition is likely to drive down the cost of complex oil & gas projects.